Wednesday, June 16, 2010

Welcome back, vacant property tax!

According to the Washington Business Journal, the vacant property tax is back. That's good news for those who live in neighborhoods inundated properties that have sat vacant for many years and are often under assessed.

Last night, the budget adopted by the DC Council restored the vacant property tax at the rate - $5 per $100 of assessed value - that was in effect prior to 2008, when the DC Council, in an election year, doubled it to $10 and eliminated most exemptions. That change, combined with increased enforcement by the Department of Consumer and Regulatory Affairs (DCRA), led to push back that ultimately led to the demise of the tax. It was replaced with a "blighted" property tax that basically only applied to houses that were already subject to condemnation and applied only to about 2% of the vacant properties previously subject to the higher rate.

Questions remain as to whether the final adopted Budget Support Act also restored some of the most frequently abused exceptions (such as those that allowed owners to evade the tax by obtaining a permit for the most minor work or placing a "for sale" sign on the property) and whether the tax will apply to both vacant lots and "improved" properties (houses and stores). Vacant lots had been removed from the "blighted" property tax, a strange distinction since vacant lots can be an even greater magnet for crime, dumping, loitering, and litter, as empty homes. Also unknown at this time is when the vacant property tax will be back in effect.

[As a side note, I'm still waiting for the day that the D.C. government provides its citizens with a legislative monitoring system that allows us to accurately view the status of legislation, amendments, and the final version of passed laws in something approaching real time. Nearly every state promptly makes such information available to the public.]